Unconfirmed Jupiter Find Contains More Oil Vs Gas Than Expected

MADRID (Dow Jones Newswires), November 13, 2008

Brazil's massive Jupiter find contains a higher oil-to-gas ratio than originally expected, Galp Energia SGPS SA Chief Executive Manuel Ferreira de Oliveira said in a conference call Thursday.

The CEO said Galp still has to await the results of a second well to confirm the exact gas to oil ratio.

The company in the meantime is still looking at Jupiter mainly as a gas reservoir, but it is already clear that it has a far higher oil content than originally thought, he said.

Galp holds a 20% stake in Brazil's BM-S-24 block that contains the Jupiter find, while Brazilian state-run oil firm Petroleo Brasileiro SA, or Petrobras, holds an 80% operating stake. De Oliveira added that the consortium thinks that the size of reserves at Jupiter is similar to that at the nearby Tupi field, where recoverable reserves are estimated at up to 8 billion barrels of oil equivalent.

The companies still haven't done a reserve estimate for Jupiter.

Galp shares rose 2.5% to EUR8.28 in Lisbon at 1129 GMT.

The Jupiter reservoir also has a higher content of CO2 than expected, De Oliveira said.

"That will be re-injected, improving the oil recovery factor," the head of the Portuguese oil company said. The CEO also said that considering geological data, Galp "can state with confidence that we already have 1 billion barrels of confirmed resources."

Those reserves refer to Galp's share in the discoveries of Tupi and Iara, he said. Iara lies in a different area of the BM-S-11 block that contains Tupi.

Petrobras has a 65% operating stake in that block, with BG Group holing 25%, and Galp 10%. The consortium estimates recoverable reserves at Iara of up to 4 billion BOE.

Galp expects its share in reserves from Jupiter, the Bem-Te-Vi and Caramba finds to amount to a further 1 billion to 1.5 billion barrels, De Oliveira said, with most of that coming from Jupiter.

"This is a conservative estimate, it could be more," he said.

De Oliveira's statement indirectly states that reserves at those three discoveries could be as high or higher as those at Tupi and Iara combined.

Galp has a 14% stake in the BM-S-8 block that contains the Bem-Te-Vi find, and a 20% stake in the BM-S-21 block that contains the Caramba find. Petrobras is operator in both blocks. Royal Dutch Shell PLC also has a stake in the BM-S-8 block.

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